The Tokyo Public Prosecutors Office also raided offices and homes of other former officials of Tokyo-based Pacific Consultants International (PCI), which often receives government contracts to carry out feasibility studies into overseas aid projects.

Prosecutors said in a statement that they arrested former PCI president Tamio Araki and three other executives on charges of illegally amassing 120 million yen (US$1.16 million) meant for weapons disposal in China.

PCI and its research unit had won contracts worth more than 23 billion yen to clean up weapons in the country, company officials said. Further questions were raised when the story broke after it emerged that no public bid was held for the contracts.

According to Japanese media, Araki has largely admitted the allegations but insisted he merely transferred profits among group firms rather than profiting personally.

Japan is financing projects to remove some 400,000 chemical weapons left by its wartime imperial army, mainly in the Chinese northeastern province of Jilin, by 2012.

Issues over their wartime past remain a major sore point between Tokyo and Beijing, which says thousands of its citizens have been killed or injured by the munitions abandoned by Japanese troops as they retreated.

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